7 Dividend Stocks to Buy Now for Decades of Consistent Returns

Stocks to buy

Dividend stocks are finally cycling back into portfolios after a few years’ worth of higher interest rates put fixed-income options ahead of dividend distribution yield for income investors. As those investors circle back toward dividend stocks, a few things have changed about how to best look at the many available offerings – but that’s true for most stock segments today.

For example, today’s growth-minded investors demand stronger financial and fundamental credentials compared to the ZIRP era, when any company forecasting significant future profits could easily attract investor funds. That sentiment generally held no matter the company’s underlying financial management (or lack thereof). Investors now exercise more caution, shying away from speculative stocks with a more discerning eye.

This change also applies to dividend stocks, though in a somewhat opposite manner. While seeking greater stability in growth stocks, investors expect long-term growth potential from their value investments. Although short-term Treasuries still offer a yield of over 5%, income-producing stocks need to provide either a higher yield, the prospect of long-term capital gains, – or both – if they want to stand out from the pack.

H&R Block (HRB)

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We may be rounding the corner on tax season, but H&R Block (NYSE:HRB) is now a top dividend stock to buy year-round. Breaking free from tax software’s inherently cyclical nature, H&R Block is increasingly looking to diversify revenue streams to keep cash coming in no matter the month.

To counter the tax sector’s seasonal nature, H&R Block launched a mobile banking service, which saw quick success and continued growth momentum. H&R Block’s latest report reveals over $456 million in net customer deposits and a total of 316,000 customer signups. Additionally, H&R Block is keen on leveraging new technologies for more efficient tax filing, working on an AI-powered tax assistance product alongside industry-heavyweight Microsoft (NASDAQ:MSFT).

The appeal of H&R Block as a must-buy dividend stock is further solidified by its impressive total yield of 11.5%. This substantial yield, backed by a modest 33% payout ratio, indicates that H&R Block retains a considerable portion of its earnings for growth initiatives while still providing significant rewards to its shareholders.

Dividend Stocks to Buy Now: Realty Income (O)

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Realty Income (NYSE:O) consistently tops lists of dividend stocks to buy now, and for good reason.

Realty’s Dividend Aristocrat status, monthly distributions, and Treasury Bill-beating 5.65% yield make it a favorite among income and dividend investors. Despite its 7% dip since January and 13% loss over the past year, Realty Income’s fundamental strength remains solid, offering an excellent opportunity for long-term investors focused on wealth accumulation.

The company boasts a high occupancy rate exceeding 98% across its portfolio, with 80% of its retail tenants operating within recession-resilient industries. Realty Income’s triple-net lease model transfers all operational risks and costs, including property maintenance expenses, to its tenants, shielding the company from rising materials and labor costs. Additionally, it enjoys the stability of long-term leases, with an average length exceeding 15 years and an active average lease duration sitting close to ten years.

Beyond its core focus, Realty Income is pursuing growth opportunities, notably through a recent sale-leaseback deal with the French company Decathlon SE. This strategy, combined with Realty Income’s growth potential, relatively low share price, and status as a dividend aristocrat, positions the dividend stock as a top pick in today’s market.

AT&T (T)

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Like Realty Income, AT&T (NYSE:T) remains a must-buy dividend stock, even after losing its Dividend Aristocrat status in 2022. AT&T distinguishes itself with a forward-thinking approach and continues to innovate as it matures in the market.

One growth initiative is AT&T’s substantial investment in AST SpaceMobile’s (NASDAQ:ASTS) plan to launch satellite-based cellular services, targeting a commercial launch later in 2024. While not immediately transformative for AT&T, this venture demonstrates the company’s readiness to explore new growth avenues and stay competitive in a crowded market.

AT&T’s late January earnings release revealed some missed targets but highlighted strong growth areas, including nearly 4% year-over-year growth in wireless service revenue. This growth signifies AT&T’s success in overcoming economic hurdles to maintain and expand its customer base with strategic pricing. Notably, AT&T added 526,000 postpaid phone subscribers, surpassing the expected 487,500, showcasing its competitive edge in a tough market.

Despite criticisms of being a yield trap, AT&T upholds a 6.73% dividend yield with a manageable 56% payout ratio, making it an appealing choice for investors focused on dividends.

Dividend Stocks to Buy Now: Occidental Petroleum (OXY)

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It’s tough to beat Warren Buffett when it comes to value investing, and one dividend stock he currently loves is Occidental Petroleum (NYSE:OXY). With an 18% payout ratio delivering a 3.85% total yield, the stock offers considerable benefits for both income and growth-focused investors.

Buffett significantly increased his investment in OXY throughout the past few years, especially in 2023, eventually securing a 27% ownership in the oil and gas company valued at over $14.5 billion. He also holds warrants that could increase his stake to 33%. And, though Occidental Petroleum has a range of net-zero and sustainability-focused initiatives, it still stands to benefit from higher crude oil pricing that’s currently creeping into markets.

Over the past few months, OXY’s share price usually fluctuated between $55 and $65. But, partially on its own merits and partially due to crude price surges, Occidental Petroleum shares are closing in on new 5-year highs. It isn’t too late to ride Buffett’s coattails on this dividend stock pick, though, as it remains a unique growth play within a mature industry.

Verizon (VZ)

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Recent telecom turbulence tested many established companies, including dividend aristocrat Verizon (NYSE:VZ). Despite this, Verizon showcases significant long-term potential for investors seeking reliable dividend stocks for long-term holding.

The primary cause of the stock’s suppression was last summer’s lead shielding scandal, which ultimately impacted telecom companies’ financial performance less than initially feared. However, Verizon’s shares have yet to rebound fully. The stock has remained relatively stagnant over the last year, with a mere 3.8% return, starkly contrasting to the S&P 500’s 21% gain during the same timeframe.

Verizon’s latest earnings report reflects continuous growth, promising capital gains alongside dividend income for investors. The company reported a remarkable increase of 16.9% in postpaid phone additions in the most recent quarter compared to the previous year, marking its strongest performance in four years. Such significant expansion in the mature telecom industry suggests Verizon is effectively capturing market share from competitors and optimizing its marketing strategy.

With a current yield of just under 6.5%, some may view Verizon as a value trap for similar reasons to AT&T. But the company’s per-share pricing dips, coupled with promising growth indicators, position it as a prime choice among dividend stocks for long-term investment.

Dividend Stocks to Buy Now: Walmart (WMT)

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Walmart (NYSE:WMT), the global leader in supermarket and general merchandise retail, ranks as a must-consider option among undervalued dividend stocks due to its widespread popularity and resilience in economic downturns.

Operating over 11,500 stores across 27 countries, Walmart boasts strategic proximity to 90% of the U.S. population within 10 miles, establishing itself as a primary choice for consumers seeking budget-friendly options.

The appeal of Walmart as a dividend stock stems from its longstanding distribution track record. Since initiating dividends in March 1974 at 5 cents per share, the company now offers a 1.88% total yield, demonstrating an average annual growth rate of 8% across the last five decades, a testament to its performance through various economic cycles.

Walmart’s ability to secure favorable prices from suppliers due to its large scale and pass these savings onto customers underpins its success. Despite the challenge posed by Amazon’s (NASDAQ: AMZN) dominance in the online marketplace, Walmart has emerged as a formidable eComm competitor. This sales stream will likely keep growing in popularity, particularly as we start edging toward summer sales season again.

Medtronic (MDT)

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The medical stock sector experienced dramatic fluctuations during and after the pandemic. Understandably, investors became wary of the significant surges and declines in company stocks, casting a shadow over the industry. Medtronic (NYSE:MDT), a leading MedTech stock, saw its market cap fall by nearly a third post-pandemic. However, recent indicators suggest a robust recovery, and its 3.5% yield continues to satisfy investors during the wait for a rebound. At the same time, investors can rest easy with Medtronic’s dividend program, as it consistently raised its annual dividend for nearly 50 years.

But, in the medical device industry, Medtronic’s impact goes beyond the financial. The company is celebrated for its innovation and advancements in medical technology and is now shifting towards more collaborative and risk-based contracts with hospital networks. These agreements aim to improve patient outcomes and lower expenses, positioning Medtronic as a crucial ally in a time when healthcare delivery costs are rising. Concurrently, ongoing collaborations with Nvidia (NASDAQ:NVDA) position Medtronic at the cutting edge of health technology trends, solidifying its status as a long-term dividend stock.

On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at www.jeremyflint.work.

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